Input Tax Credit(ITC) under GST Act, 2017 Part II

DOCUMENTARY REQUIREMENTS AND CONDITIONS FOR CLAIMING INPUT TAX CREDIT [R. 36]

The input tax credit can be availed on the basis of any of

the following documents, namely, –

  • an invoice issued by the supplier;
  • an invoice issued by a registered person who is liable to pay tax on reverse charge basis subject to the payment of tax;
  • a debit note issued by a supplier;
  • a bill of entry or any similar document prescribed under the Customs Act, 1962 or rules for the assessment of integrated tax on imports;
  • an Input Service Distributor invoice or Input Service

 

Distributor credit note or any document issued by an Input Service Distributor.

Registered person can be availed only if applicable particulars of Registration are contained in the invoice and he has furnished the relevant information in Form GSTR-2. [Details of inward supplies of goods or services]

Therefore, the invoice should contain details of:

  1. name of the supplier;
  2. GSTN;
  3. specific invoice number format;
  4. name and address of recipient;
  5. address of delivery;
  6. HSN Code for goods or accounting code for services;
  7. description and quantity of the goods/services;
  8. value of the goods;
  9. rate and amount of tax;
  10. other prescribed information.

Input tax credit may be availed by such registered person if the document does not contain all the specified particulars but contains the details of the amount of tax charged, description of goods or services, total value of supply of goods or services or both, GSTIN of the supplier and recipient and place of supply in case of inter- State supply.

No input tax credit is available in respect of any tax paid pursuant to any demand by the authorities on account of any fraud, wilful misstatement or suppression of facts.

Section 16(2) proviso – When the goods are received in lots or instalments, ITC can be availed only upon receipt of the last lot or instalment.

An order is placed for supply of 1000 garments. Supplier dispatches 100 garments every day starting from 1 October 2017 and issues tax invoice for 1000 garments on 1 October 2017. Payment was released on 5 October 2017. Last lot of 100 garments was received on 10 October 2017. Credit can be availed on or after 10 October 2017. However, if separate invoice is issued for each of the lots then credit can be taken on receipt of each lot.

Availment of ITC without payment to the supplier

A recipient of the goods/services may avail the input tax credit without paying the supply amount plus tax to the supplier. If such payment is not made within a period of 180 days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon. If, subsequently, the amount plus tax is paid then the recipient will again be entitled to claim credit of input tax. The condition for payment to the supplier within 180 days for availment of credit does not apply to supplies on which tax is payable under reverse charge.

Therefore, a person can take input tax credit without payment to the supplier. However, he is required to pay the consideration along with tax within 180 days from the date of issue of invoice. This condition is not applicable where tax is payable on reverse charge basis. If he does not pay the consideration along with tax within 180 days from the date of issue of invoice, the amount of ITC would be added to his output tax liability. This amount will be proportionate to the amount not so paid. He would also be required to pay interest. However, he can take ITC again on payment of consideration and tax. However, the interest paid will not be refunded.

 

 

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